If you are familiar with the cryptocurrency and blockchain space, you must have heard of “layer-1 (layer-1)” and “layer-2 (layer-2)” solutions. These solutions aim to find a way around the scalability problems in Blockchain. In this article, we will touch on both these terms and transfer popular layer 1 coins and layer 2 coins. cryptocoin.com We wish you pleasant reading!
What is Layer-1?
Blockchain scalability means raising the speed and processing power of the network. Scaling can refer to an increase in the number of transactions per second. One of the solutions applied to overcome the scalability problem with the increase of the delay problem in the networks is Layer 1 solutions. Layer 1 Blockchain is a solution that enhances the protocol itself without making any changes to the network to make the overall system more scalable. Two popular approaches in this solution are consensus exchange and sharding.
- Consensus: Proof-of-Work (PoW) is a traditional mining-based consensus mechanism used in some popular cryptocurrencies, especially Bitcoin. However, PoW is struggling with several issues, such as slow processing and heavy energy consumption. For example, we can say that non-mining Proof-of-Stake (PoS) is a Layer-1 solution used to make networks using PoW more scalable and sustainable.
- Sharding: Sharding is a method taken from databases and adapted to Layer 1 solutions. It occurs by dividing a network into a series of separate database blocks known as “shards”. With the simultaneous operation of the divided parts, the processes are accelerated and a solution to the scalability problem is found.
What are the Layer 1 coins?
Examples of Layer-1 coins are Solana (SOL), Cardano (ADA), Polkadot (DOT), Terra (LUNA), Avalanche (AVAX), Algorand (ALGO), Tron (TRX), Phantom (FTM), Elrond ( Cryptocurrencies such as EGLD) and Kadena (KDA) can be issued. Notable for these altcoins include Clayton Gardner, CEO of crypto investment management firm Titan, Wave Financial CEO Matteo Perruccio, and former Citigroup executive Matt Zhang.
What are Layer-2 and its coins?
Layer-1 is used in conjunction with the underlying main Blockchain architecture. Layer-2, on the other hand, is an overlapping network that sits on top of the underlying Blockchain. It adds on top of the main structure but does not change the structure of the network. These are called layer-2 solutions. Think Bitcoin and the Lightning Network. Bitcoin is a layer-1 network; Lightning Network is layer-2. Their purpose is to speed up the network and reduce transaction fees.
Some of the Layer 2 crypto money projects are as follows: Polygon (MATIC), Loopring (LRC), Immutable X (IMX), OMG Network (OMG), 0x (ZRX), Celer Network (CELR), Bancor (BNT), Perpetual Protocol (PERP), DeversiFi (DVF), ZKSwap (ZKS).
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